Share gains led by CBA

Media Reporter

The sharemarket has finished slightly higher, with modest gains across the board as investors looked overseas for leads.

The benchmark S&P/ASX200 index added 10.2 points, or 0.2 per cent, to 4719.7, while the broader All Ordinaries gained 11.9 points, or 0.3 per cent, to 4745.7.

Materials ended 0.1 per cent higher, financials and energy both added 0.3 per cent, while IT was the only sector to post a loss, slipping 0.2 per cent.

New home loan approvals slumped 0.5 per cent, defying expectations of a 0.5 per cent rise, while the ANZ job advertisements survey showed a drop of 3.8 per cent in December. Job advertisements are now 20 per cent below February 2012 levels.

‘‘I suspect investors may be interpreting this as saying ‘well it makes it more likely we could see a rate cut’ and therefore they’re really having a careful look at those companies that pay a high fully franked dividend,’’ said JBWere executive director Mike Kendall.

‘‘Overall there seems to be a fairly solid level of confidence as we move through January that the recent gains in our market can be sustained,’’ Mr Kendall said.

The local bourse got some support from regional markets, with most bourses trading higher and Shanghai soaring more than 2 per cent.

Locally, banks were mixed. CBA jumped 0.4 per cent to $61.63 and NAB added 0.7 per cent to $25.74. ANZ slipped 0.2 per cent to $25.21 and Westpac fell 0.3 per cent to $26.50.

The big miners were also mixed, Rio Tinto added 0.3 per cent to $65.99, while rival BHP lost 0.3 per cent to $36.57.

However, they also noted that the 18 per cent rise in iron ore, since July 1 2012, has not been matched by jumps in coking coal or Chinese steel prices, 28 per cent and 7 per cent lower than July 1 respectively.

"This would suggest gains in iron ore are more related to temporary factors in the market and not a function of a widespread increase in Chinese activity," said Mr Odonaghoe.

Shares in AJ Lucas, which provides drilling infrastructure for mining, surged 13.4 per cent to $2.08 on news that its United Kingdom subsidiary was holding talks with major investors in an attempt to replicate the shale gas revolution in the United States.